GROW OR GROW: DETERMINANT FACTORS TO CONTINUOUS AND SUSTAINABLE GROWTH, THE UNIMED-BH CASE

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ISSN: 2047-2528 Vol. 3 No. 08[01-17]

©Society for Business Research Promotion | 1

GROW OR GROW: DETERMINANT FACTORS TO CONTINUOUS AND SUSTAINABLE

GROWTH, the UNIMED-BH CASE

Carlos Alberto Gonçalves FUMEC and UFMG Universities, Brazil.

Professor at FUMEC University and UFMG (Belo Horizonte – Brazil). Doctor in Business Administration /USP and Master in Computers Science PUC/RJ . Teaches disciplines of

Strategy and Planning, Innovation and Entrepreneurship. Author of many Articles, books and

book’s chapters published on Strategy and Marketing. Coordinator at NUME – Centre of Research in Marketing and Strategy.

E-mail: [email protected]; [email protected]

Rosana Silva Chaves FUMEC University, Brazil.

Master in Business Administration at FUMEC University. Experience on: Management on the Administration areas, Financial, Controllership and Supplying. Took over in the past few

years, the Strategy Planning, Quality Management, Corporate Management and Human

Resources areas on health companies. Responsible for Strategy Planning and for implementing Good Management Practices; high performance team management.

E-mail: [email protected]

Joaquim Silva Ramos Lisbon University – ISEG, Portugal.

Professor of International Economics and Strategy at the School of Economics and Management, University of Lisbon (ISEG/UL, Portugal). Member of SOCIUS, the research

Foundation for Science and Technology Development Center in the Social Institute of Economic

and Management - ISEG from Technical University of Lisbon. PhD in Economic Policy Analysis from École des Hautes Études en Sciences Sociales (EHESS), Paris. "Diplôme d'Études

Approfondies" in Economics at EHESS. Degree in Economics from ISEG, Technical University of Lisbon.

E-mail: [email protected]

Mauricio Fernandes Pereira Federal University of Santa Catarina – UFSC, Brazil.

Professor at Universidade Federal de Santa Catarina. Master’s and Doctorate’s in Production Engineering/UFSC; Professor of Strategy, Strategic Planning, Strategic Change, Personal

Strategic Planning and Strategic Management. Author of articles and books on Strategy and

Planning. Post-Doctorate on Business Administration at USP and Sociology at ISEG – Lisbon–Portugal. President of Fórum Nacional dos Conselhos Estaduais de Educação 2012-2013.

Membership Holder of Fórum Nacional de Educação - FNE e Membro Titular do Fórum

Estadual de Educação – FEE. E-mail: [email protected]

ABSTRACT

The aim of this paper is to present essential factors that historically ensure notorious and well-known growth of a firm on a long term. A lot of studies

attempt to explain why some organizations grow and maintain, while others

fail to leverage results, and disappear, do not hold up. The theme of strategy of growth and survival of firms is the subject of research of renowned

management scholars (Fleck (2001, 2003, 2004, 2009), Porter (1992), Collins & Porras (1995), Penrose (2006) e Chandler Junior (2002), for trying to explain

this phenomena and propose some theoretical research lines as the theory of

organizational traits and slacks resources (emphasis on Fleck (2009). We sought to apply existing theories to a case from a Medical Cooperative -

Unimed-BH (Brazil), which was chosen because of its notorious growth that

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differs from other market players in the same sector. We used the framework

as proposed by Fleck (2001), based on his studies on the growth path of f irms General Electric (GE) and Westinghouse (WH) and a qualitative longitudinal

analysis research method seeking to understand the organizational traits that

explain the growth and/or decline of these organizations. This model was then used seeking to understand the organizational traits and characteristics of

Unimed-BH (Brazil) which enabled its growth, in a longitudinal analysis, in

order to contribute to the comprehension of this study. It was built a causal map from the responses, based on the applied method.

Keywords: Company growth. Superior performance. Organizational traits. RBV (Resource Based View).

1- INTRODUCTION Many are the studies made about Strategy in order to identify the factors that lead to

differentiation between firms, searching to find a way of heading against the sustainability and continuous growth challenges to obtain competitive advantages and, consequently,

self-perpetuating.

The systematic sustainable growth of companies in dynamic markets of big competition is

no easy task for the managers, becoming necessary that the companies assess opportunities and threats, adjust themselves quickly to changes, and distinguish itself

permanently from the competition.

Many authors that study the firms’ growth can be indicated and, among these, Fleck (2001,

2003, 2004, 2009), Porter (1992), Collins & Porras (1995), Penrose (2006, originally

published Theory of the Growth of the Firm, from 1959) e Chandler Junior (2002) can be highlighted.

We wish, in this essay, to give attention to topics of firm growth, seeking theoretical support evidenced on the sequence of studies elaborated by Fleck (2001, 2003, 2004 and give

emphasis on the 2009 study) due to the studies on the topic and, evidenced, in the General

Electric (GE) and Westinghouse (WH) case studies, analyzing secondary data collected from these firms in a period of 12 decades. The work of this researcher sought to explain “the

why” the two firms (GE and WH) inserted in the same sector, contemporary and with origins

similarity, presented meaningful differences in the growth process and continued existence, or decline.

Thereby, as mentioned, was taken as an emphasis reference and theoretical analysis base to this study the framework developed by Fleck (2009), for this being, as the author

mentions, an evolution of her studies, to represent a more consistent theory to explain the phenomenon of companies’ growth.

To constitute, according to its proposition, a theoretical evolution and presenting an outline attached to the companies’ compe titiveness, growth and survival.

For the object of this study, the Unimed-BH (Brazil) case was taken, acknowledged for having a remarkable growth along its operation. The medical co-op in study acts in the

health insurance segment (supplementary health) and shows superior performance during

its existence.

Unimed-BH, is a company that offers medical and hospital treatment services with an

operational center in the city of Belo Horizonte (State of Minas Gerais – Brazil).

It is a medical co-op that acts in the supplementary health sector, classified (2013 data) in

7th place in the ranking of the 10 biggest health insurance companies of Brazil, according to data of the Agência Nacional de Saúde Suplementar – ANS (National Agency of

Supplementary Health), though its action is regional, according to the rule of the systems in

which it belongs to.


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The medical co-ops, initially created with the intention of reacting to the so-called

“commodification of medicine” and the “proletarianization of the medical profe ssional” (Unimed do Brasil), became important players in the market of health insurance s in Brazil

and today it takes around 36% of the 48,7 million clients of supplementary health (ANS,

2013), with approximately 17,5 million clients. It is considered the biggest cooperative medical complex in the world, according to Lumertz (2011).

From 1998, with the edition of the Law n. 9.656/98 there was a health system regulation, which caused deep alterations in the so-called “health insurance market” in Brazil. Since

then, besides the regulatory pressure from public entities, a combination of factors have

been bringing new challenges to the insurance companies, among them, the high cost of medical assistance, population aging, the increasing in the health services usage and the

speed of technological innovations. The health sector regulations coincided with a fundamental change in the governance model of Unimed-BH, end of lifetime trustees, with

other movements, as the company’s professionalization and strategy definition that had as

purpose putting the organization as a health sector reference in the national scenario.

Strategy definition that gathered divergent interests, enhanced its resource usage, ensured

its perennial and generated value for the clients, was the challenge presented to health insurance companies in Brazil and health systems in the world, which wouldn’t be different

to medical co-ops and to Unimed-BH.

Thereby, this study seeks to identify and understand which are the factors and processes

adopted by the leaders over time in search of making “perpetuate” and, improve, grow, save

its tangible and intangible resources in the competition process. The search to achieve phases, resources and competence baseline, in a regular way, that positions it in a more

sustainable field and that comprehends going beyond “merely surviving” in the market and

achieve superior baselines in a virtuous cycle. Therefore, we sought as the study’s objective to verify the adherence between the traits proposed by Fleck (2009) in the company growth

explanation (in this case, UNIMED-BH, Brazil). Accordingly, analyze Fleck’s (2009)

organizational traits contributive capacity (“business personality” ontological elements”) to characterize applied behaviors by the leaders of sustainable and continuous growth

companies.

2- THEORETICAL REFERENCE – the theories of company growth Many are the models and theories proposed in order to explain the superior performance conservation and permanence of some companies, whilst others fail and cease to exist.

Among other theories, Porter’s theory of Competitive Advantage and Generic Strategy stands out (1992). The author indicates that every company aims the creation and support

of competitive advantage, seeking a defensive or proactive position based on the strengths

that interfere in its course of action. Therefore, the leaders should make decisions in order to obtain attractive returns, based on the so-called five competitive strengths, which are:

rivalry among existing competitor, bargaining power of supplier, bargaining power of

buyers, threat of substitute products or services and the threat of new entrants.

In counterpoint to Porter’s theory, the RBV – Resource Based View (Barney; Hesterly, 2011)

evaluates the internal resources as competitive base for companies. The work of Penrose (2006), originally published Theory of the Growth of the Firm, from 1959, is recognized as the

RBV theoretical approach base. Penrose (2006) and other followers argue that the

companies’ growth relies on possession, access and usage of heterogenic and unique resources or the relationship among these. The resources, on the other hand, to generate

competitive advantage, need to be valuable and rare, hard to copy and substitute and the

company must manage them to i ts advantage (BARNEY, 1986, 1991 apud GONÇALVES et al, 2011). This theory, however, emphasizes the inside out, in other words, the means of an

effective internal management of tangible and intangible resources (idiosyncratic factors), can set the company in a better position on the market.


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Penrose (2006) stresses that even though emphasis is given to companies’ internal

characteristics (resources and capacities), the environmental forces and business performance that affects the behaviors cannot be set aside.

Another author that seeks company’s growth comprehension is Chandler Junior (2002), focusing his study on the analysis of growth strategies used by modern business

companies. He developed his study analyzing the American industrial organization from

1850 to 1920, a period understood by him as “the modern capitalism”. Thenceforth arises a new organization, the multidivisional company, suggests Chandler (2002, p.12) that the

“the visible hand of management supersede s the invisible hand of market coordination…” of

Adam Smith.

As well as Penrose (2006), Chandler Junior (2002) offers an oriented view to processes and internal resources. He evaluates factors as: managerial attitude, infrastructure importance,

information role and the innovation on the compani es’ growth and the capitalism.

According to the author, administrators naturally seek alternatives for a more effective and profitable resources management, resulting in a continuous growth process. And the

underutilization of the available resources will always provide new productive opportunities,

generating new abilities and resources, also underutilized, and forming a circular relationship. This generates continuous growth and continued existence. Was identified

that the organizations’ continuous growth process is equipped with a self-reinforcing

mechanism, and that the experienced expansion to support growth and increase the resources and abilities utilization generated other modalities of resources and underutilized

abilities, conducting to a new growth. This expansion mechanism generating new expansion

was denominated continuous growth engine by Chandler Junior (2002). The author explains that operational unbalance on speed and productive capacity is potentially capable

of starting a continuous growth process.

Chandler Junior (2002) addresses, still the concept of continued existence of the company

is related to its capacity of hiring and retaining administrators that compromise with the

company in a long range, helping regenerate its capacity and acquire continued existence propensity.

2.1 - ORGANIZATIONAL TRAITS TO GROWTH AND SELF-PERPETUATION PROPENSITY OF

ORGANIZATIONS Additionally to the presented authors, Fleck (2009), proposes a model, or archetype, to

explain the self-perpetuation tendency of companies, evaluating, over 12 decades, the growth trajectory of American companies General Electric (GE) and Westinghouse (WH) ,

abstracting, from this study, the denominated organizational traits. The superior

performance of an organization, measured by its growth indicators, explains its propensity to remain active. To Fleck (2004), long-range success relies as much on the capacity of the

company to execute lengthy power on the market, occupying a privileged position in the

sector, as it does on the capacity of structuring organizational processes that permit capturing, exploring and reconfiguring valuable resources.

Fleck (2009), based on the Chandler Junior’s (2002) work, develops a framework from two engines that boost the organizational growth, whi ch are: the continued existence, with the

administrators long-ranged commitment with the company envisioning its continued

existence with the organizational integrity preservation; and the renovation upon the continuous growth, with the search of a more effective and profitable utilization of the

tangible and intangible resources, boosting its growth. Growth generates need for new

resources, or the better utilization of the existing ones, increasing in quantity and quality the cast of subtilized resources and abilities, promoting a growth oriented virtuous cycle.

Chandler Junior (1977) and Penrose (1980) apud Fleck (2009), introduce the concept of slack resources – that comes from the excess of resources so that the company can operate

in a more elevated level, in order to achieve innovations, survive the uncertainties and avoid conflicts. This slack of resources enables the company to develop a self-renovating capacity,

envisioning its expansion and continuous growth.


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The organizational traits were synthe tized in an archetype form and identified in the

literature as the seven growth traits of Fleck (ANDRADE FILHO, 2003 apud LUDKEVITCH, 2005). Posteriorly, Fleck (2009), in an earlier publish of the same study, simplified his

model and summarized the organizational traits in five, according to the structure

presented in the “Archetypes of Organizational Success and Failure” (2009) article.

Chart 1

Organizational

Traits or

Challenge

Category

Description

Polar Responses to Challenge

Unfavorable Pole Favorable Pole

Trait 1

Enterprising

Promoting continued

entrepreneurship by

fostering the firm’s

willingness to carry out

reinforcing, value-creating

expansion while also

preventing the

organization’s overexposure

To risks.

Satisfactory or Less

(Low level of ambition, versatility,

imagination, vision, fund-raising,

ingenuity, and judgment, using nil-

& defensive-motivated moves)

High-Reaching

(High level of ambition,

versatility, imagination,

vision, fund-raising

ingenuity, and judgment,

using productive- &

hybrid-motivated moves)

Trait 2

Navigating into

the Dynamic

Environment

Dealing with the

organization’s multiple

stakeholders in order to

secure value capture and

Organizational legitimacy.

Reactive

Poor Monitoring, inadequate usage of response strategies.

Active

Regular monitoring, usage of opportune and adequate

response strategies.

Trait 3

Diversity

Management

Sustaining the firm’s

integrity in the face of

increasing organizational

Conflicts and rivalry.

Fragmentation

(Failure to establish bonding relations and coordinating

capabilities.)

Integration

(Successful development of

Bonding relations and

coordinating capabilities.)

Trait 4

Human

Resources

Provisioning

Steadily equipping the firm

with necessary qualified

Human resources.

Tardy

Just-in-time or after the fact

actions.

Soon

Planned in advance.

Trait 5

Complexity

Management

Managing complex issues

and solving problems of

increasing complexity so as

to avoid risks to the

Organization’s existence.

Ad hoc

(Poor problem solving

capabilities upholding quick search

for solutions and precluding

learning)

Systematic

(Strong problem solving

capabilities promoting

comprehensive search for

solutions and fostering

learning)

Source: FLECK, DENISE apud Authors Edition “Archetypes of Organizational Success and Failure” (2009)

Fleck (2009) suggests that five traits are required from the organizations, which can determine its success, or failure. These traits are also denominated by Fleck as growth

challenges, namely: Entrepreneurship, Dynamic Environment Navigation, Diversity

Management, Human Resources Provisioning and Complexity Management.

3- METHODOLOGICAL COURSE The development of the research question was executed by a longitudinal study, with the execution of semi-structured interviews with leaders and people related to the historic

growth of the company. We sought to investigate the company’s organizational traits and its

effects in its continuous growth. Therefore, the interview script was organized, considering


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the existence of organizational traits suggested and adapted from Fleck (2009). These traits

were divided into sub-themes to facilitate the interview’s orientation and analysis.

The research can be considered a unique case study for presenting characteristics of

notoriety, since the firm’s growth (YIN, 2001). Were interviewed, deeply, a total of 8 key people, for having followed the company’s history for a long period of time.

The interview’s project, in its analysis, occurred through the laddering technique. The laddering technique is a qualitative technique, which emphasizes the sense making logic,

utilizing semi-structured interviews to comprehend the relation between concepts,

consequences and values. It has as purpose a perceptual map development between concepts, objects and values, indicating the interrelations among them (REYNOLDS;

GUTMAN, 1988 apud LADEIRA & ZANCHETA).

It was investigated, by the interview’s script if the interviewed noticed the existence of slack

resources that allows the sustainable growth of the analyzed company.

It was opted to select the traits attributes, enumerated by the interviewed, by the criteria of

quantity and relevance. They were considered the attributes of frequency bigger than 1, or those that, still equal to 1, was noticed, by historical factors, as effective identification of

traits. Secondary data, documents and company’s publications released on internal and

external means were used.

Two categories that synthetize the response to the five organizational traits were

constituted, based on the two polar of Chart 1, in other words, if the response to the challenge is on the favorable or unfavorable pole.

The indicators of Unimed-BH were also checked, seeking to evaluate if there is a relation between the results found, in other words, expansion or retraction periods pointed out by

the indicator, and organizational factors that might have resulted in growth.

4- TRAJECTORY GROWTH EVIDENCES AND RESULTS ANALYSIS The growth mensuration indicators were calculated using the study of Fleck (2001) and Ludkevitch (2005) as basis. We sought to reduce the country’s economic growth

interference, dividing the results found by the Gross Domestic Product (GDP), as suggests

Ludkevitch (2005).

In the Unimed-BH case some Growth and Productivity indicators alterations were made.

The income was used in place of Gross Sales, and in Profitability, Operational Results were used in place of Net Profit. Due to data availability in the analyzed period, we opted to use

Brazil’s GDP from 1991 to 2012, available on the IPEA website (IPEADATA, 2013).

The number of employees is available from 1997; therefore the productivity indicator was

only calculated from 1997 to 2012. The other indicators were calculated from 1991 to 2012,

since this is the available period of Financial Demonstrations. The calculation method is defined by the equations (Eq. 1, Eq. 2 and Eq. 3):

x 1000

Equation 1: Size Indicator

Source: Developed by authors

x 1000

Equation 2: Profitability Indicators



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x 100

Equation 3: Productivity Indicators


Accounting information from 1991 to 1993 was provided in the time currency (Cruzeiro

and Cruzeiro Real). To make the information comparable, the numbers were converted from the time currency to the current currency.

Graphic 1 represents size and profitability growth. We can observe that, adjusted by the GDP factor, the company presented income growth throughout the period. The profitability

trajectory, also adjusted by GDP, shows that the company showed little satisfactory results

in the beginning of the cycle, which was reverted from 1995, becoming a growth trajectory, with relative stability from 1997 to 2004. An expansion occurs from 2005 on, though is

falls, and recovers afterwards.

Graphic 1: Size and Profitability Curves Comparison - Unimed-BH (1991-2012)

Source: Developed by authors based on Accounting Data of Unimed-BH and Management Reports/GDP (IBGE e

IPEADATA)

By the Growth and Profitability curve overlapping, Graphic 1, adjusted to the scale, we can observe that there is a relative coincidence in the growth, stabilization and contraction

periods. It can be observed, still, an ascendant curve period from 1995 to 1998, in a new

growth phase from 2004 and 2005 on, which puts the company in a new result baseline, characterizing a new clear expansion phase.

As for productivity (Graphic 2), what can be seen is that there is a decline between 2001 and 2003, and a continued decrease, though less accentuated, from that period on. The

company’s history brings inputs to justify the strong curve inclination in the beginning of

the period as we can observe in its Management Reports and the observed data in the Human Resources area.


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Graphic 2: Productivity Trajectory - Unimed-BH (1997 a 2012)

Source: Developed by authors based on Accounting Data of Unimed-BH and Management Reports/GDP (IBGE e IPEADATA)

This period, that coincides with a change in management, envisioning its professionalization, is marked by a strong expansion of the personnel board to enable a

strategic change, and there are evidences of a human resources slack in order to support

the continued growth.

To complement the analysis, the Market Share of Unimed-BH was calculated since 2000,

Graphic 3, which is the first year that data was provided by ANS about the health plan beneficiaries quantity. The calculation was made adjusted by the health plans beneficiaries,

in general, based on the well-known methodology of market share calculation, which is the

company’s participation in relation with the market of its activity, here represented by the number of clients or beneficiaries (Eq. 4)

Equation 4 – Market share


It can be observed, from this graphic’s analysis, that Unimed-BH grew more than the supplementary health system in the period in question. This characterizes its performance

well against the sector, which makes it intriguing to verify which reasons induced this

performance, evaluating consolidated results, in the interviewee’s perception, about the factors that facilitated its superior performance against the competitors.

Graphic 3Market Share - Unimed-BH (2000 a 2012)

Source: Source: Developed by authors based on Management Reports Data of Unimed-BH/ Beneficiários - Caderno de Informações da Saúde Suplementar – ANS (Agência Nacional de Saúde Suplementar) - Mar/2013


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5 – GROWTH ORGANIZATIONAL TRAITS The result analysis from the organizational traits viewpoint of Fleck (2009) apud Caldeira (2012) demonstrates which are the main organizational challenges and the respective

responses to them, evaluating if there is an organizational tendency to one of the poles, in

other words, if Unimed-BH responds to the challenge in a favorable or unfavorable way, which can lead it to self-perpetuating or self-destructing.

For each factor or organizational challenge was established a favorability condition, or not, depending on the nature of the challenge response presented, in other words, if it is in the

pole that contributed to the organization’s continuous growth and continued existence,

favorable pole, or if it is in the opposed pole, unfavorable.

The map (Pic. 1) represents the research findings, in other words, the traits identification based on the interviewee’s quotes. The numbers indicated in the link s, identify the number

of attributes or characteristics of each trait, mentioned on the testimonies. The map (Pic. 1)

structure presents 3 hierarchical leve ls, organized from bottom to top as: Organizational Characteristics of Unimed-BH, Organizational Challenges and Self-Perpetuating Propensity.

Picture 1: Hierarchical Map of Correlation between characteristics, traits or organizational challenges, slacks

and tendency to success of Unimed-BH

Source: Developed by authors with support from GAIE (Unimed-BH), based on Qualitative Research Data.

Therefore, seen from bottom to top, the “Organizational Characteristics of Unimed-BH”

topic, contemplates both evaluated poles, favorable and unfavorable, which are related to

the 5 organizational traits.

The second level of the map relates the 5 “Organizational Challenges” and they are exactly

the five organizational traits described by Fleck (2009) in her model.

Unimed-BH Organizational Characteristics

FAVO RABLE UNFAVO RABLE

Organizational Challenges Enterprising Navigating into

The Dynamic

Environment

Complexity

Management Integration and

Coordination Mechanisms

Human Resources

Provisioning

11

24

2 1 4

3 4

6 11 6

Organizational Growth

Slack Resources

Organizational Integrity

24 11

6 11

Propensity to Self-Perpetuating


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CHART 1 describes the characteristics pointed out in the interviews, segmented by the 5

Organizational Traits, according the interview’s script. These characteristics were segregated in one of the poles, favorable or unfavorable and the total value of each pole was

related to the organizational trait (Pic. 1). The numbers are contemplated in the links and

relations indicated by lines and arrows. Thus, there is a representation of the interviewee’s consolidated perception, about the positioning of Unimed-BH.

As an example, for the Enterprising Challenge, 24 favorable and 1 unfavorable characteristics were found, as shown on CHART 1, according to the interviewee’s quotes.

Therefore, Unimed-BH, is considered a company that contains a group of entrepreneurship

characteristics.

Chart 1 – Gathering of Attributes/Characteristics/Frequency/Challenge Response

Organizational Trait

Attributes/Characteristics

Response

Frequency

Challenge Response /

Favorability

(B) Enterprising Innovation

Change on management from 1998 on. 12,6 FAVORABLE

Change to a broader health assistance (health

promotion)

9,0 FAVORABLE

Creation of own services to serve new plans. 6,0 FAVORABLE

Products and services innovation starting in 1998 to

become distinct on the market. 5,0 FAVORABLE

Creation of new plans for the lower class. 4,0 FAVORABLE

Focus on corporative clients. 2,4 FAVORABLE

Economic system created by medical co-op, credit co-op, pension fund and bound co-ops.

2,2 FAVORABLE

Technology Innovation. 2,0 FAVORABLE

Innovation on the relationship with providers. 1,0 FAVORABLE

Health solutions sales to clients, with optimization in

health spending, for more than 10 years. 1,0 FAVORABLE

Relationship with co-op members – bigger management participation.

1,0 FAVORABLE

Commercialization changes (campaign aiming small

and medium companies) 1,0 FAVORABLE

Creation of co-participatory products. 1,0 FAVORABLE

(B) Enterprising 5 Anticipations

Strategic planning is structured and implemented. 9,6 FAVORABLE

Goals are challenging. 5,0 FAVORABLE

There is a goal achieving. 5,0 FAVORABLE

Strength of the number of co-op members. 3,6 FAVORABLE

Participation in all levels of deployment and strategy following.

3,0 FAVORABLE

Emergent strategies are incorporated to the planning throughout the year.

3,0 FAVORABLE

Unimed’s system organization as a system starting in

the 80s. 2,2 FAVORABLE

Capacity of executing what is defined as strategic 2,0 FAVORABLE

115


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Organizational Trait

Attributes/Characteristics

Response

Frequency

Challenge Response /

Favorability

direction.

Continuous improvement on the strategic

formulation throughout the years. 2,0 FAVORABLE

(B) Enterprising

6 Risks Propensity

Creation of own services that increase the

exposition to risks, though they are measured. 4,0 UNFAVORABLE

Bold company, therefore, prone to risks. 3,0 FAVORABLE

Prone to risks, in a measured way. 3,0 FAVORABLE

Source: Developed by authors based on interviews and the Fleck Model.

On the testimonies, the entrepreneurship of Unimed-BH is highlighted throughout its

history, with good anticipation and innovation capacity. This entrepreneurship gained strength from 1998 on, when a new management takes on, and the company

professionalizes itself. In this period, a new strategi c direction is defined, executing long-range planning, with goals and actions defined, and the achievement following, in a

structured form.

The same logic applied on the Enterprising trait, was applied in the other challenges or

organizational traits. Thereby, the Navigating into the Dynamic Environment trait shows 11

favorable and 2 unfavorable characteristics.

Chart 1 – Gathering of Attributes/Characteristics/Frequency/Challenge Response- – Continuation

(C) Capacity of Navigating into the

Dynamic

Environment

1 Anticipation

Relationship intensification with co-op members

with stimulus for bigger management participation. 9,6 FAVORABLE

Permanent market and competitors monitoring and acts with anticipation.

6,0 FAVORABLE

Supports and adheres to regulation, using it for its own favor.

5,0 UNFAVORABLE

Market health plan demand. 3,6 FAVORABLE

Creation of the product Unifácil for lower purchasing power classes in 2001.

3,0 FAVORABLE

Predominant anticipation attitude. 3,0 FAVORABLE

Usage of regulation benefits. 2,4 UNFAVORABLE

Partnerships with providers stimulating network

qualification. 2,0 FAVORABLE

Technological mechanisms incorporation. 2,0 FAVORABLE

Creation of own services was structuring and

contributed to co-op growth. 2,0 FAVORABLE

Anticipation relative to regulation questions. 2,0 FAVORABLE

Technical reserve constitution before the market competitors.

1,0 FAVORABLE

Focus on the client. 1,0 FAVORABLE


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The Enterprising and Navigating into the Dynamic Environment favorable characteristics

led to Organizational Growth, according to Fleck’s (2009) model. On Picture 1 it is shown the correlation between these factors by lines and arrows, which immediately links the

Organizational Challenges to a superior level. There are, in total, 24 favorable

characteristics derived from Enterprising and 11 derived from Navigating into the Dynamic Environment, which leads to Organizational Growth.

And the Human Resources Provisioning presents 6 favorable and 3 unfavorable characteristics, as shown on CHART 1.

Chart 1 – Gathering of Attributes/Characteristics/Frequency/Challenge Response- – Continuation..

(D) Human Resources

Provisioning

Professionalization process starting in 1998. 7,6 FAVORABLE

Human Resources based in order to grow. 7,0 UNFAVORABLE

Search for qualified Professionals. 5,0 UNFAVORABLE

Formation and appreciation of internal professional on opportunities.

3,0 FAVORABLE

Human capital was fundamental to the growth. 2,0 FAVORABLE

(D) Human Resources

Provisioning 2- Organizational Culture

Employees integration process. 2,0 FAVORABLE

Innovation, growth and sustainability culture. 2,0 FAVORABLE

Organizational culture on establishment phase. 2,0 UNFAVORABLE

Cooperative culture, with open environment and participation tendency.

1,0 FAVORABLE


It was evidenced, in the interviews, fragility regarding human resources supplies, which is a problem to the market, in general, but it can become an obstacle to its continued growth

tendency. Integration and Coordination Mechanisms possess 11 favorable and 4

unfavorable characteristics, on the interviewee’s perception.

Chart 1 – Gathering of Attributes/Characteristics/Frequency/Challenge Response- – Continuation…

(E) Integration and Coordination

Mechanisms

Well Succeeded Cooperative Model 5,6 FAVORABLE

Many relationship channels with clients. 4,0 FAVORABLE

Definition of many participation forums of the co-op

members. 4,0 FAVORABLE

There is a good conflict management when they occur, but there is no system to deal with them.

4,0 UNFAVORABLE

Good Governance System. 3,0 FAVORABLE

Big Decisions taken to the Assembly. 2,0 FAVORABLE

Establishment of a more balance relationship with

hospital providers. 2,0 UNFAVORABLE

One man, one vote, which brings risk to the

succession process, minimized by the management

professionalization.

1,0 UNFAVORABLE

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(E) Integration and

Coordination

Mechanisms

3 Chain Integration through vertical structuring

Creation of own services was structuring and

contributed to co-op growth. 3,0 FAVORABLE

Creation of own services increased the business risk

and fragmentation possibility. 2,0 UNFAVORABLE

Own services contribute to integration through strategic definition supplying the company’s needs.

2,0 FAVORABLE

(E) Integration and

Coordination Mechanisms

Relationship intensification with co-op members with

stimulus for bigger management participation. 9,6 FAVORABLE

Differentiation according to the corporate model – the cooperative.

1,0 FAVORABLE

Presence of Unimed in the community, on both assistance and social actions.

2,0 FAVORABLE

Relationship establishment with many publics: co-op members, providers, corporative and individual

clients.

1,0 FAVORABLE


The company has been dealing well with diversity on the interactions and with the

integration with public diversity in its surroundings, even against the environment complexity in which it operates. It has been seeking to intensify the relationship and

stimulates the participation of the cooperated doctors, especially due to its corporate form,

the cooperativeness. There are also reports about its participation in cultural and social -environmental projects.

The Integration and Coordination Mechanisms as well as the Human Resources

Provisioning, when favorable, lead to Organizational Integrity, also according to the model.

On the same way, we can verify the 6 Human Resources Provisioning characteristics and the 11 Integration and Coordination Mechanisms, that lead to Organizational Integrity.

As for Complexity Management, the organization shows 6 favorable and 4 unfavorable, according to the interviewee’s viewpoint.


(F) Complexity and

Systematic Problem

Resolution

Health sector complexity by vocation. 7,0 UNFAVORABLE

Co-op members need to deal with individual interests

X Co-op interests. 4,0 UNFAVORABLE

Regulation brought complexity to the sector. 3,0 UNFAVORABLE

(F) Complexity and

Systematic Problem

Resolution

2 Systematic Problem Resolution

Decisions based on well-defined processes. 2,0 FAVORABLE

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Casuistic problem resolution, to each case one

solution. 2,0 UNFAVORABLE

(F) Complexity and

Systematic Problem

Resolution

3 Work processes relatively defined

Data existence and Structured information for

decision making, goal definition and following. 3,0 FAVORABLE

Clear role and responsibility definition, from the

Assembly to the Board of Directors, Superintendence

and Employees, yet with some difficulties and in

change.

2,0 FAVORABLE

Existence of many discussion and deliberation

forums. 2,0 FAVORABLE

Technological change to support management

alterations. 1,2 FAVORABLE

The management process facilitated role and

responsibility definition and also reports. 1,0 FAVORABLE


Unimed-BH deals with a high complexity environment because it has a structure set in its surrounding, according to the interviews. It is part of a co-op system, Unimed’s system, but

also inter-relates with other systems and co-ops, Credit Co-ops, other medical co-ops,

Federação Nacional de Cooperativas Médicas – FENCOM, and other entities of the medical sector, the Doctors Union and the Associação Médica de Minas Gerais (AMMG). The

supplementary health sector dynamism and requirement corroborate to its market of action complexity.

The hierarchical map (Pic 1) portrays, thus, from the most favorable challenges, the main factors that have been bringing self-perpetuating propensity. Therefore, Organizational

Growth can be imputed as the biggest impellent to its continued existence.

It can be observed, still, that all traits present more favorable characteristics. To this effect,

and more particularly, Enterprising, Capacity of Navigating into the Dynamic Environment

are highlighted, whose favorable characteristics have broad superiority if compared to the unfavorable characteristics. The company presents Human Resources Provisioning as its

biggest fragility, according to the interviewees.

The interviewees were also questioned if they noticed the existence of slack resources that

might have propitiated the company’s growth, throughout its existence, based on the theory

of Chandler Junior (2002) and Fleck’s model (2003).


(H) S lack Resources

Financial slack from 1998, with economic-financial

solidity, enabling innovation implementation and

appreciation of the co-op members’ insurance quote.

8,0 -

Care Resources slack with good network of providers

and co-ops members in the 80s. 2,0 -


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It was portrayed, on the map (PIC. 1), the slack of financial resources mentioned, by

unanimity, as being the one that propitiated its sustainable growth from the year 2000, enabling the business reinvestment, scrap return to co-op members, private welfare, legal

reserves implementation imposed by ANS and growth of its patrimonial base. It was also

mentioned, by some interviewees, human resources slack, from 1998, due to growth of employee number to support organizational restructuring. Observed hypothesis on the

productivity graphic, Graphic 2– presents an important result fallback in this period.

6- CONCLUSIONS This study sought to identify in this Health Plan Operator, Unimed-BH, elements that could

show if the company possess continued growth characteristics, in other words, yet, prone to perpetuity. Based on the model proposed by Fleck (2009), it can be concluded that the

company has a continuous growth and self-perpetuating tendency. This evaluation is grounded, by both growth indicators analyzed and organi zational traits identified on the

interviewee’s testimony.

CHART 2 reiterates the analysis and relates, in a synthetic way, the characteristics that

respond to each trait or organizational challenged, based on the interviewee’s answers,

elucidating the research’s findings.

Organizational Traits or

Challenge Type Trait Description

Response proposed to the challenge –

Organizational Practices.

Trait 1

Enterprising

To follow reinforcing expansion

and value creation, at the same

time prevents organization from

risk overexposure.

Change on the attention to health model.

Introduction of new market strategies. Strategic

Plan Structured and daring goal setting with

compatible risk level. Investment on

company’s own services creation.

Trait 2

Capacity of Navigating

into the Dynamic

Environment

To deal with multiple stakeholders

to assure value capture and

organizational legitimacy.

Usage of external environment changes to its

favor (regulation, market). Investments on the

creation of the company’s own services .

Investment on the relationship with

stakeholders. Organizational change

implementation. Facility to adapt to occurred

changes.

Trait 3

Diversity Management

Company’s integrity maintenance

when faced with rivalry and

crescent organizational conflicts.

Vertical integration with the creation of its own

services. Institutionalization of knowledge

management. Management model stimulating

participation. Investment on the relationship

with stakeholders.

Trait 4

Human Resources

Provisioning

To promptly equip the company

with qualified and needed human

resources.

Organizational change implementation. Proper

human resources supply. Search for human

development.

Trait 5

Complexity

Management

Crescent complexity problem

solving in order to avoid

organizational existence risk.

Roles and responsibilities definition.

Technology Innovation. Strategy definition

agility on problems solving conduction.

Chart 2: Summary Chart of the main characteristics that respond to organizational challenges.

Source: Developed by authors based on collected data with qualitative interviews.

The testimonies analysis (content and sentence casualty) permit to conclude that Fleck’s

(2003) framework contributes to traits identification that promoted growth sustaining.

Thus, is it noted if its theoretical adherence explains the phenomenon. It can be observed


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on Chart 2. What the evidences show, however, is that the organizational traits theory

constitute factors-goals on the behavior explanation that promoted growth at Unimed-BH.

It is worth mentioning that the theoretical framework proposed, was reviewed by the author

herself throughout time and it has been consolidated as a possible perspective to understanding which reasons lead to companies’ growth.

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GROW OR GROW: DETERMINANT FACTORS TO CONTINUOUS AND SUSTAINABLE GROWTH, THE UNIMED-BH CASE

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